M/S Shreya Life Sciences Private Limtied vs. Superintendent Ae-1 CGST Commissionerate
Facts
The petitioner is aggrieved by the cancellation of their GST registration by the Superintendent, CGST, vide an order dated 13.03.2020. The stated ground for cancellation was the non-filing of GST returns for over six months. The respondents contended that the petitioner had defaulted in filing returns for sixteen months and had not paid tax, leading to a tax liability of ₹1,48,01,516, which the petitioner allegedly admitted. The petitioner disputed this, claiming the liability was only for outstanding interest on delayed tax payments and that they had cleared all tax dues up to February 2020. The petitioner sought to pay the entire amount in installments, referencing Section 80 of the CGST Act.
Held
The Court disposed of the writ petition by granting liberty to the petitioner to make a fresh representation to the Commissioner, CGST, within four weeks, along with an upfront payment of ₹30,00,000. The Commissioner was directed to consider the petitioner's request for revocation of the cancellation order within ten days of receiving the representation and the upfront amount, in accordance with the law. The impugned cancellation order dated 13.03.2020 was to be kept in abeyance until a decision was taken on the petitioner's representation. The petitioner's GST registration would be restored once the nationwide lockdown concluded. The Court did not explicitly decide on the validity of the cancellation order itself but facilitated a process for its potential revocation based on the petitioner's compliance and the Commissioner's decision.
Key Issues
1. Whether the cancellation of GST registration under Section 29(2)(c) of the CGST Act, 2017, was justified given the petitioner's alleged default in filing returns for sixteen months and non-payment of tax, leading to a disputed liability of ₹1,48,01,516. Petitioner's arguments: The petitioner argued that their tax liability was only on account of outstanding interest for delayed payments, not the principal tax amount, and that they had cleared all tax dues up to February 2020. They relied on Section 80 of the CGST Act, which permits payment of tax and other amounts in installments, and expressed willingness to pay the entire amount, including interest, in installments. Revenue's arguments: The respondents contended that the petitioner had defaulted in filing GST returns for a continuous period of sixteen months and had not paid the tax amount, justifying the cancellation under Section 29(2)(c) of the CGST Act. They highlighted an admitted tax liability of ₹1,48,01,516, as per the petitioner's writ petition. The respondents suggested that if the petitioner made a fresh application to the Commissioner, CGST, under Section 80 of the CGST Act along with an upfront payment, the Commissioner would consider the request.
Sections Cited
Section 29(2)(c), Section 80
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WPMS No. 746 of 2020 Hon’ble Manoj K. Tiwari, J.
Heard Mr. S.K. Posti, learned Senior Advocate assisted by Mr. Ashutosh Posti, learned counsel for the petitioner and Mr. Hari Mohan Bhatia, learned counsel for the respondents. Petitioner is aggrieved by cancellation of his GST Registration by respondent No. 2/Superintendent, CGST vide order dated 13.03.2020. The ground for cancellation, as indicated in the said order is that petitioner had not filed GST return for more than six months. Mr. Hari Mohan Bhatia, learned counsel for the respondents submits that petitioner had defaulted in submitting GST returns for continuous period of sixteen months and besides petitioner had not paid the amount of tax, therefore, his GST registration has rightly been cancelled by invoking Section 29(2)(c) of Central Goods and Services Tax Act, 2017. He further submits that petitioner has tax liability of `1,48,01,516/-, as admitted by the petitioner in para 15 of the writ petition. Mr. S.K. Posti, learned Senior Counsel appearing for the petitioner, however, disputes this submission made by Mr. Hari Mohan Bhatia, learned counsel for the respondents and
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